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Miranda is covered by her employer's money purchase pension plan. If the plan provides life...

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Finance

Miranda is covered by her employer's money purchase pension plan. If the plan provides life insurance on Miranda's life, which of these statements regarding Miranda's income tax ramifications are CORRECT?

  1. Miranda will not be taxed on the pure protection cost of the life insurance.
  2. A money purchase pension plan is not allowed to provide life insurance coverage.
  3. Miranda must include the pure protection cost of the life insurance in her taxable income.
  4. The pure protection cost of the life insurance will be treated as nontaxable basis once Miranda begins receiving distributions from the plan.

    A)

    II only

    B)

    III and IV

    C)

    I and III

    D)

    I, III, and IV

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